Sony to raise prices by up to a third to offset tumbling value of the pound

Sony is to raise prices of its electrical goods in the UK by up to a third to
offset the tumbling value of sterling.

Portable DVD player: Sony DVP-FX720

By Graham Tibbetts

3:28PM GMT 21 Nov 2008

Over the next few months the Japanese company will charge retailers more for a number of its products.

However, industry experts have predicted that the price increase will not be passed on to customers because shopkeepers are desperate to encourage spending.

Sony announced the move just days after the pound fell to its lowest level against the euro, meaning the company was making less money from British sales.

A spokesman said: "Sony UK can confirm that in the past 48 hours it has communicated to its trade channel that due to adverse changes in the Yen/Euro & Euro/Pound exchange rate over the last six months, and with this uncertainty set to continue into 2009, Sony will increase the trade price of a number of products over the coming months.

"The precise level of price increases has not yet been agreed, but it is likely that the vast majority of products affected will see increases of significantly less than 33 per cent.

"As these testing trading conditions continue, Sony does not believe that it will be alone in taking this form of action."

The spokesman added that Sony had no control over whether or not it would translate into higher prices for shoppers.

Krishan Rama, a spokesman for the British Retail Consortium, said: "I would be surprised if the price rises were passed on to customers because retailers recognise customers are under great pressure. I can only imagine that margins will be squeezed even more as they try to tempt customers to come in to shop.

"They will probably also try to increase efficiency to save costs elsewhere."

Last month Sony, whose products include Bravia flat televisions, Cyber-shot digital cameras and PlayStation game machines, reported a 72 per cent fall in profits for the second quarter of 2008.

Slowing camera sales and the strength of the Yen were among the factors blamed.